With many individuals now being self-employed, some mortgage lenders have changed how they can access income. Most customers are offered incorrect details when applying directly to building societies, banks, and less skilled mortgage lenders in the market.
If you are running a limited company, it might be hard to know where to start searching for the right mortgage. The criteria used by most mainstream lenders are not geared towards a self-employed application.
And even so, it is an irony that, at times, limited company directors find it hard to get the right mortgage than employees they have hired.
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There are different limited director mortgage products aimed at company directors as well as mortgage lenders specializing in this demographic.
As a company director, how you declare your income and the way it will be assessed can be different from customers in full-time employment.
And that is why it is vital to look for mortgage lenders at the Right Mortgage UK who completely understand your situation, and that includes the following:
- Deposit amount
- Trading history
If you are self-employed, the kind of business you run can dictate what is regarded as income. For the case of limited company directors, the income calculated on average from the recent three years of your personal dividends and salary is usually used.
Some lenders might as well be willing to have a look at your business profits. But others use the latest years’ figures instead of an average.
While there could be a degree of difference between what mortgage lenders need, as a company director, you are likely to present the following:
- Business bank statements
- HMRC tax overview
- SA302 tax forms
- Certified accounts that cover recent two or three years
If you have employed yourself, you need to be in touch with your mortgage broker before you declare your expenses and income. That is because a mortgage broker may help you get the most out of your business in terms of the mortgage. A mortgage broker may also help when it comes to the application for a mortgage and understands what is needed from you to be allowed by lenders.
It might be difficult to get lenders who tick all the right boxes. But if you get one, you will get exclusive deals and access to products unavailable on the high streets.
There is no artificial limit placed on freelancers, directors, or self-employed in terms of borrowing. This narrows down to affordability. It is possible to borrow as much as you may afford to pay, just like everyone else.
Mortgages don’t use income formulas anymore as they used to before. Now it is all about how affordable your mortgages are, your outgoings, and your income. If you are able to prove you can afford mortgages, then you qualify for one.
Some lenders can put you off if your bank accounts show losses for your company. However, this doesn’t necessarily mean getting mortgages is impossible. With the right information, documents, and mortgage broker, you will be able to get one easily.